Global miner Rio Tinto is finalising a $3.8bn (£2.4bn) takeover bid for Africa-focussed Riversdale, according to sources, upping an earlier offer as it seeks to gain key coking coal supplies amid soaring demand from India and China.
Rio Tinto is locked in talks with Australian-listed Riversdale Mining over a A$16 per share takeover offer, Reuters sources said.
Shares in Riversdale, which said earlier this month it was talking to Rio about a A$15 per share offer, were placed in a trading halt earlier in the week after media speculation over an offer.
Spokesmen for both Riversdale and Rio Tinto declined to comment.
A successful bid for Mozambique-based Riversdale would give it access to what is expected to be the world's second-largest coal exporting market in coming years.
Rio is currently underweight in the commodity. Its large reserves of thermal coking coal have relatively low costs and are well situated to serve China and India's booming markets.
"With Mozambique emerging as a potentially substantial supplier, the trend will obviously be upwards if you're talking about Africa as a whole," said Andrew Harrington, an analyst with Patersons Securities in Sydney.